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Shale Gas Developers Might Have to Disclose Fracking Chemicals

Both manufacturers and environmentalists are now left “scratching their heads” after the Obama administration has proposed new shale gas rules. Some businesses are befuddled why this kind of oversight is not left exclusively to the states while all greenies want to know why certain drillers are opposed to federal standards.

At issue is a proposal released last week by the U.S. Department of Interior that would require shale gas developers to reveal the chemicals they use while exploring for shale gas on public lands. In some places around the country, those chemicals are blamed for polluting ground water that comes out of faucets. By disclosing such processes, the explorers could potentially avert public criticism and earn the goodwill they need to improve the fortunes of shale gas.

For their part, those developers are adamant that such regulations should remain at the state level, noting that the country’s geography varies from region-to-region and that a one-size-fits-all approach is not just impractical but also duplicative and expensive. Despite that general approach, some such as Chesapeake Energy are willingly disclosing the chemicals they use to frack, or to ply loose the shale that is embedded in rocks.

“As we continue to offer millions of acres of America’s public lands for oil and gas development, it is critical that the public have full confidence that the right safety and environmental protections are in place,” says Interior Secretary Ken Salazar. “The proposed rule will modernize our management of well stimulation activities – including hydraulic fracturing – to make sure that fracturing operations conducted on public and Indian lands follow common-sense industry best practices.”

He goes on to say that the proposed rules, which have a 60-day comment period, are line with a recent executive order that coordinates all federal agencies involved in overseeing natural gas development. The administration also says that it would consider those special cases in which the revelation of the chemicals would put certain producers at competitive disadvantages -- the main argument used by most of them right now.

The implications: Production from shale formations has grown from a negligible amount just a few years ago to almost 15 percent of total U.S. natural gas production. By 2035, natural gas, generally, will make up about 45 percent of the utility generation market, says the U.S. Energy Information Administration.

“Get the facts and the science on the table,” says Frank Yoho, an executive with Piedmont Natural Gas, in an in-person talk. “When you see the administration making the same statements, industry needs to get on board.”

Long-term Approach

The National Association of Manufacturers seems perplexed: It is asking why the Obama administration publicly says that it is for an “all-of-the-above” energy strategy but yet, it is trying to hamstring natural gas producers -- the ones that are supplying the lifeblood to job creators. The association is saying that the proposed regs would slow down an affordable source of energy that is now driving economic growth.

At the same time, it says that the states are already effectively overseeing the drilling process and that adding another layer is duplicative and expensive. In fact, 12 states have rules on their books that require shale gas producers to divulge the chemicals they are using to frack; 206 companies are complying.

“It’s time the administration’s actions reflect its rhetoric so that we can begin to include shale development as an essential part of a real all-of-the-above energy strategy,” says Jay Timmons, president of the manufacturers association.

Earthworks disagrees, saying that when it comes to fracking, federal standards should become the floor -- not the whipping boy for producers who think they can schmooze their local state regulators. Beyond disclosing which chemicals are used, the rules would also create consistent minimum requirements for wellbore integrity and waste disposal.

The green group is applauding those natural gas producers that have fully divulged the mixtures they employ when drilling, as well as their proactive community outreach programs. It also feels strongly that the toxic water that is flushed down and that comes back up should be re-used or recycled, not simply dumped. 

“Many of these approaches are economical to adopt,” says Bruce Baizel, senior staff attorney for Earthworks.

Indeed, if shale gas is to reach its potential, then its developers must fully disclose the chemicals they are using to frack. Taking a hardline approach will backfire and truly make the public skeptical, hurting those who would rely on such fuel to grow their enterprises.

EnergyBiz Insider is the Winner of the 2011 Online Column category awarded by Media Industry News, MIN. Ken Silverstein has also been named one of the Top Economics Journalists by Wall Street Economists.

Twitter: @Ken_Silverstein


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